Correlation Between Jumia Technologies and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both Jumia Technologies and Jeffs Brands at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jumia Technologies and Jeffs Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jumia Technologies AG and Jeffs Brands, you can compare the effects of market volatilities on Jumia Technologies and Jeffs Brands and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jumia Technologies with a short position of Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jumia Technologies and Jeffs Brands.
Diversification Opportunities for Jumia Technologies and Jeffs Brands
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jumia and Jeffs is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jumia Technologies AG and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands and Jumia Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jumia Technologies AG are associated (or correlated) with Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of Jumia Technologies i.e., Jumia Technologies and Jeffs Brands go up and down completely randomly.
Pair Corralation between Jumia Technologies and Jeffs Brands
Given the investment horizon of 90 days Jumia Technologies AG is expected to generate 0.69 times more return on investment than Jeffs Brands. However, Jumia Technologies AG is 1.46 times less risky than Jeffs Brands. It trades about 0.08 of its potential returns per unit of risk. Jeffs Brands is currently generating about -0.25 per unit of risk. If you would invest 387.00 in Jumia Technologies AG on November 9, 2024 and sell it today you would earn a total of 16.00 from holding Jumia Technologies AG or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jumia Technologies AG vs. Jeffs Brands
Performance |
| Timeline |
| Jumia Technologies |
| Jeffs Brands |
Jumia Technologies and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jumia Technologies and Jeffs Brands
The main advantage of trading using opposite Jumia Technologies and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jumia Technologies position performs unexpectedly, Jeffs Brands can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jeffs Brands will offset losses from the drop in Jeffs Brands' long position.| Jumia Technologies vs. Sea | Jumia Technologies vs. MercadoLibre | Jumia Technologies vs. PDD Holdings | Jumia Technologies vs. JD Inc Adr |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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